'Massive, devastating' effect for aid programs

Mr Law told The World the move from Mr Abbott is "the third strike in the triple whammy", following the $4.5 billion budget cut and Mr Abbott's decision not to name a minister for international development.

He says the realignment will not result in a more efficient way of delivering aid, and there is a clear clash in objectives.

"There is a conflict because then you get into this ridiculous discussion around how aid is a part of a global relationship to lift people out of poverty but it's actually all about trade," he said.

"This has been the dominant narrative from conservative politics for the last 20 years.

"I think AusAID has performed very well over the years. It's been difficult dealing with the scale-up, but there's a single driving force in there to work with people living in poverty and transform their lives.

"You can't neatly align that with Australia's national economic and political interests."

Australia's international reputation being "trashed"

Mr Law says he has received phone calls of disappointment from colleagues worldwide since the announcement.

"Unfortunately, I was with the United Nations in New York when Australia had this sort of policy before, and Australia wasn't highly regarded on the international stage," he said.

"We're in the middle of a busy 18 months where Australia could emerge with a lot of pride and respect in international community. These three big announcements over the last two weeks do nothing but really trash our international reputation."

The ABC understands AusAID's director-general Peter Baxter has resigned, but the Government disputes this.

A spokesperson for Foreign Affairs Minister Julie Bishop says Mr Baxter has taken extended leave and the Government looks forward to his continued service in another senior official role.